Taking out a personal loan from banks in Singapore can at times be rather difficult. This is because of a great deal of paperwork involved. In general, banks always check your credit records before they authorize your personal loan application. Besides, banks do not consider your monthly salary when they are looking into your personal loan application. You may consider taking out a loan from licensed moneylenders if you reside in Singapore.
These legal lenders are approved by Singapore’s Registry of Moneylenders. They are bound by set rules and regulations that allow them to do business following these regulations. The money lender’s registry decides on the limit of the amount to be loan out, the interests to be charged, as well as the fees a moneylender can charge.
Therefore, the question is whether moneylenders are a suitable choice for bank loans. Let’s look at some facts.
Moneylenders Provide Small Loans
Given that your loan requirement is a few thousand Singaporean dollars, a licensed moneylender can assist you to access this amount. Based on the money lending restrictions put in place, a legal moneylender will only give you a loan totaling four times your yearly earnings.
Though, some of the money lenders will not give borrowers loans equaling the full amount. The lending restrictions put in place by the lender’s registry are aimed at protecting borrowers. And also it’s for regulating the fast-growing money lending industry in Singapore.
These money lenders will authorize a loan amount of about $10,000 given that your yearly earning is about $30,000. Therefore, when you are in search of smaller payday loans to help you buy a budget plane-ticket, getting your car repaired or some other lesser need, turning to a licensed moneylender is always a good choice.
This makes it easy for a borrower to have quick cash fast and within a short period. In taking the short-term payday loans you can meet your urgent financial obligations. And it’s payable in the next paycheck depending on the repayment period set.
When you need a huge amount of loans to help with renovations of your home, taking out a loan from a money lender isn’t a good option. most of the time, many money lenders will not take the risk of lending significant payday loan amounts of like $20,000 and more because of the risks involved in the case a borrower defaults.
Speedy Loan Approval
Different from banks, most money lenders are quite fast when processing loan applications. When you take with you all the necessary documents, the loan will be approved in about 30 minutes by your money lender. In most cases, it will not take you over 45 minutes to have the ready money in hand after submitting your documents and application to your licensed money lender.
This is because money lenders are dedicated to helping their borrowers quickly address their financial needs. Since money lenders have flexible rules than banks their loan approval process goes much faster thus taking a shorter time for you to access your loan money. This makes money lenders a better option for individuals who are in urgent need of quick cash and are unable to get the cash from banks.
Higher Interests Charged
Although the interest rates offered by moneylenders are on the higher side, there are these lenders that offer lower rates. Even though money lenders are still acting according to the registry rules, the rates charged by most moneylenders are higher than what banks would charge on loans. This may be a downside of taking out loans from money lenders. However, you must consider the repayment conditions they are offering you with the loan you take.
To ensure that you get the best interest available in the market, be sure to make time to shop around comparing lenders. Always compare the different provisions and services the different moneylenders offer before you can settle for a particular money lender. This way you will be assured of getting the right lender who will help you meet your financial needs at suitable interest rates.
Forgiving Credit Rating Assessment
Many borrowers are worried that their credit score may affect the approval of their loan request approval. Even as money lenders are usually more forgiving when checking a borrower’s credit rating, they are keen on who they extend a loan to. In most cases, banks are very strict when it comes to checking the client’s credit history before approving their loan applications. When you have a low credit score, oftentimes your bank will not offer you a loan, but most moneylenders will still let you do so.
Some money lenders give less weight to your credit score compared to banks. And they normally never deny a loan to individuals due to their poor credit scores. Since it may take you time to fix the poor credit score, taking out a loan from a legal money lender would be your best alternative when you are in urgent need of money. Nevertheless, money lenders could turn down your loan application should they find out you already have taken a loan from other money lenders.
This often makes money lenders a better choice since they are not very strict with a borrower’s credit score. As long as the borrower has proof of being able to repay the loan and has a steady source of income, they will be considered for loan approval by moneylenders in Singapore.
Taking out personal loans from banks in Singapore is at times rather difficult. This is due to a great amount of paperwork involved. Whether moneylenders are a suitable choice for you compared to the bank depends on the purpose of the loan you are taking.
Moneylenders mostly focus on giving smaller loans, especially when you are in search of smaller payday loans. These lenders are also very fast when processing your loan applications. And also are usually more forgiving when checking a borrower’s credit rating. Even then, they are keen on who they extend a loan to.